About the Worldwatch Institute: Worldwatch is an independent research organization based in Washington, D.C. that works on energy, resource, and environmental issues. The Institute’s State of the World report is published annually in multiple languages. For more information, visit www.worldwatch.org.

Worldwatch Institute’s State of the World 2014 explores the role of ethical capitalism in the quest for sustainable economies

Washington, D.C.—Entrepreneurs are beginning to challenge business as usual, infusing ethics into the notoriously ruthless corporate world. In State of the World 2014, contributing author Colleen Cordes discusses the small, but growing, impact of benefit corporations and other triple-bottom-line companies —which strive to have positive social and environmental impacts, as well as to earn a profit—in the transition to a sustainable economy (www.worldwatch.org).

“Put simply, the conventional economic model—amoral capitalism—and the willingness of so many investors and consumers to tolerate it are two of the most challenging threats to preserving a livable human future,” writes Cordes, public policy consultant and director of outreach and development for The Nature Institute of Ghent, New York.

In the last few years, however, public restlessness has been growing as the environmental and social abuses of the conventional economic model are revealed. And while activists and labor groups, investors and consumers, and national and international nonprofit groups are pushing for more corporate transparency, corporations themselves are still central to speeding the urgently needed transition to sustainable economies.

“A remarkable new breed of business is volunteering to be held publicly or even legally accountable to a triple bottom line: prioritizing people and the planet, while also promoting profits,” writes Cordes. Led mostly by small and medium-sized companies in the United States (and to a lesser extent in Canada and Chile), many of these companies have been pushing to be officially responsible for their social and environmental effects, not just their financial success.

Almost all of these companies are privately held, although a few major corporations have recently become connected to the triple-bottom-line movement through subsidiaries they have acquired. On the one hand, such acquisitions can expand the movement’s reach. On the other, they also raise questions about whether the movement’s identity and potential will be diluted if large corporations acquire smaller, triple-bottom-line companies but are not strongly committed to their new subsidiaries’ particular social and ecological values.

Given this and other challenges, the rise of companies seeking public accountability for their social and environmental impacts is a small revolution. But a few larger companies, like Patagonia and King Arthur Flour, have already joined the ranks. And there is considerable potential to entice other companies to enter the movement and to inspire the public to demand that other companies follow.

“Although it could take years for a Fortune 500 benefit corporation to emerge, such conversations—and broader advocacy by citizens and public interest groups—could begin now to firm up and speed up that possibility,” writes Cordes.

Worldwatch’sState of the World 2014 investigates the broad concept of “governance” for sustainability, including action by national governments, international organizations, and local communities. State of the World 2014 also highlights the need for economic and political institutions to serve people and preserve and protect our common resources. For more information on the project, visit http://www.worldwatch.org/state-world-2014-governing-sustainability.